BLD
TopBuild Corp.
$411.08
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 22.5% above fair value
You pay
$411.08
Bear
$246.00
Fair
$335.46
Bull
$424.91
Bear
$246.00
-40.2%
$18.27 × 14x + net cash
Fair
$335.46
-18.4%
$18.27 × 18x + net cash
Bull
$424.91
+3.4%
$18.27 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($18.27)
Implied Market Multiple
22.5x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $519.67 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $335.46 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Wall Street's average price target is $519.67 (from 29 analysts). Our estimate is 47% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing